Shrimp Insights: India, Indonesia, and Vietnam all poised for continued growth

Published on
April 7, 2021

Despite setbacks caused by the COVID-19 pandemic and increasing competition from Ecuador, Asia’s top shrimp exporting nations should expect continued growth, according to a top shrimp market analyst.

Willem van der Pijl, who founded the Seafood Trade Intelligence Portal (STIP) in 2013, formed Shrimp Insights, a consultancy aimed at the shrimp sector, in June 2020. He recently published a series of blogs on his site looking deeper into the shrimp industry in India, Indonesia, and Vietnam.

India, the world’s top shrimp exporter, had a difficult year in 2020, with production and export performance severely hit by the COVID-19 pandemic. The South Asia nation is estimated to have produced between 650,000 and 700,000 metric tons (MT) of shrimp last year, down from 780,000 to 800,000 MT in 2019.

According to data from the Society of Aquaculture Professionals (SAP), production in India’s shrimp-farming states of Odisha, West Bengal, Andhra Pradesh, and Gujarat, all fell in 2020.

And India’s shrimp exports dropped 14 percent year-on-year to 575,000 MT in 2020, with the U.S., China, and the E.U. remaining the country’s primary markets. Its sales of raw peeled products dropped 12 percent to 21,200 MT, though its overall exports of cooked and other value-added products to the U.S. increased last year. Its drop in production was replaced in the global marketplace by Ecuador, which boosted sales of raw peeled products by 15,000 MT. Ecuador sharply increased its shipments of mid-sized shrimp to the U.S. last year, while India dropped 14 percent of its U.S. market share. India also lost a portion of the shell-on market in the U.S. to Ecuador and Indonesia.

India’s exports to China performed even worse, falling 35 percent, or more than 100,000 MT in 2020, due to the impact of COVID-19 and trading uncertainties caused by a border dispute.

“With China being India’s most important market for smaller-sized shrimp, China’s recovery will be crucial for India’s 2021 outlook,” van der Pijl said.

India will struggle to improve production in the first half of 2021 due well-stocked inventories in the U.S. and China’s heightened food security checks, van der Pijl said. Nonetheless, India’s outlook is bright, given its potential to expand its capacity and its low production costs.

“I am sure that, in the long run, India will be a major contributor to the expected surge of global farmed shrimp production,” he said. “I even believe that under the right conditions, India’s own surge in production might come sooner than we expect.”

Elsewhere in Asia, van der Pijl projected Indonesia, which increased its vannamei exports by 24 percent last year to 209,000 MT, will continue its significant shrimp-sector growth.

Indonesia’s overall shrimp exports totaled 239,000 MT in 2020, 15 percent higher than 2019, with vannamei accounting for 75 percent of the total, black tiger shrimp 16 percent, and wild-caught shrimp 9 percent, according to data from Indonesia’s Department for Competitiveness of Marine and Fisheries Production.

Discrepancies between the two data-sets could be due to the fac that Indonesian exporters were forced to stockpile some product as a result of a shipping container shortage that grew more acute at the end of 2020. Additionally, Indonesia’s improved 2020 figures could possibly be the result of lower domestic consumption,  van der Pijl surmised, pointing to the fact that shrimp feed sales dropped by 12 percent to 309,000 MT last year – a figure that suggests the country’s 2021 shrimp production might decline, he said.

The U.S. was Indonesia’s top export market for shrimp, followed by Japan. Higher demand from the retail sector in the U.S. was the main contributor to the growth of the Indonesia’s exports last year. However, many U.S. buyers have shifted over to purchasing smaller sizes from other suppliers, such as Ecuador, as Indonesia processors sold larger sizes, according to van der Pijl.

Indonesia has set an ambitious goal of growing its shrimp industry by 250 percent by 2024. Van der Pijl said he skeptical of Indonesia’s ability to reach that target, but said the country does have potential to increase its production significantly.

“I expect that improved availability of consistently high-quality post-larvae, combined with more biosecure farms and sustainable production practices, will result in an increase in Indonesian vannamei production in 2021 and beyond,” he said.

Another Southeast Asian nation making moves in the shrimp segment is Vietnam, which grew its farmed shrimp exports by 8 percent in 2020 to USD 3.3 billion (EUR 2.8 billion), supported by the growth of vannamei sales due to higher demand from the retail sector during the pandemic. Van der Pijl said Vietnam has an advantage in its Best Aquaculture Practices- and Aquaculture Stewardship Council-certified farms producing vannamei shrimp, which will help meet rising global demand for ecolabel-certified raw peeled and cooked peeled products.

“I think in terms of demand the situation might be quite good for Vietnam due to continued retail consumption during the first and probably also second quarter of the year at the cost of foodservice,” van der Pijl said.

According to van der Pijl, Ecuador remains the biggest threat to Asia’s shrimp export trade, and evidence of that can be seen in the fact that it increased its share of the U.S. and European markets as compared to its total exports last year, especially challenging Asian competitors in the retail sector. In the U.S. market, Vietnam had an advantage in cooked shrimp but trailed Indonesia and Ecuador in exports of raw peeled and headless shell-on (HLSO) shrimp, according to the Vietnam-focused Shrimp Insights report. And prompted by the loss of the Chinese market and encouraged by a free trade agreement with the E.U., Ecuador has increasingly targeted Europe to drive up sales.

“In doing so, Ecuador may have taken some raw peeled retail business away from Vietnam, which used to be northwestern Europe’s favorite supplier,” van der Pijl said.

Lower demand due to the pandemic and possible more competition from Ecuador have together contributed to the moderate growth in Vietnam’s shrimp exports to Europe last year, despite the support from its new free trade agreements with the European Union and the United Kingdom.

But van der Pijl said he believed Ecuador’s aggressive moves into the U.S. and E.U. markets are just a temporary tactic and that Ecuadorian shrimp exporters will return their focus to Asia – and specifically China – once the COVID-19 pandemic comes under full control.

Photo courtesy of Phensri Ngamsommitr

Contributing Editor reporting from Hanoi, Vietnam

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